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For about thirty years the Fair Labor Standards Act (FLSA) Rule has been that a tipped employee who receives less pay per-hour, because they are a tipped employee, must spend 80% of their time at work doing activities that are tip generating. This means 80% of the employees, time had to be spent on tasks directly related to serving the customer, thereby directly generating tips. Hence, napkin folding, “opening the restaurant,” and other tasks would need to be kept to less than 20% of a tipped employee’s time at work. In November of 2018 the Department of Labor rolled back this Fair Labor Standards Act (FLSA) guidance for tipped employees. However, courts have consistently held that the rule is still in effect, allowing cases to move forward against Buffalo Wild Wings, and Denny’s, as if the rule had not changed. The status of this rule, and how courts will treat it, changes constantly, and depends on the judge, because the Department of Labor rolling back this Fair Labor Standards Act rule for tipped employees was not done in the traditional way that agency rules change.

Whether one assumes that 80% of the time a tipped employee works must be spent on tipped activities to satisfy the Fair Labor Standards Act (FLSA), or less due to the rollback of the rule, what counts as a tipped activity is very specific and defined through hundreds of court decisions. Many activities that restaurants would normally consider tip generating tasks, are not tip generating tasks. It is difficult to know which tasks are tip generating, versus non-tip generating, without a Fair Labor Standards Act (FLSA) lawyer to guide you through the legal swamp that is tipped versus non-tipped tasks under the Fair Labor Standards Act (FLSA). For help in determining if your tipped employees are spending eighty percent of their time on tipped tasks, or if you have been sued by a tipped employee claiming to have done more than the allowed percentage of non-tipped tasks, call Joshua Sheskin at the South Florida Headquarters of Lubell Rosen. – Joshua H. Sheskin,Esq., 954-880-9500, jhs@lubellrosen.com